Best Banking Stocks With High FII Holdings: Banks are critical to the economy and necessary for individuals and businesses to thrive. The banking sector has benefited the most from India’s booming economy by lending loans, providing banking services, rural outreach, technology adoption, and so on. In this article, we will take a look at the Best Banking Stocks With High FII Holdings and deeply analyze their scale, financials and more.
FII Holdings demonstrates foreign investors’ trust in the company. Foreign stakeholder influence on company ownership is also important, particularly in decision-making. However, the main case is that FPIs buy when there is an opportunity and sell when there is an economic downturn, and tightening interest rates causes prices to be more volatile.
5 Best Banking Stocks With High FII Holdings
Best Banking Stocks With High FII Holdings #1 – Axis Bank
Axis Bank was founded in 1993 as UTI Bank and began operations in 1994. It was founded in collaboration with SUUTI, LIC, GIC, NIC, NIA, OIC, and UIIC. LIC owns 8.22% of the company as of today.
With 5,000 domestic branches and 15,751 ATMs, the bank serves segments such as large and mid-sized corporations, MSMEs, agriculture, and retail businesses. As of March 31, 2023, there were over 1,500 virtual relationship managers.
Foreign portfolio investors held 49.96% of the FII Holdings, which included the Government Pension Fund Global (1.91%), the Dodge and Cox International Stock Fund (3.28%), the Vanguard Emerging Markets Index Fund (1.05%), and the Government of Singapore (2.18%). Other foreign investors contribute the remaining 3.04%.
For FY23, the company earned 23.5% of its income from the Treasury, 26.17% from corporate and wholesale banking, 50.24% from retail banking, and 0.09% from other banking businesses.
The company reported Rs. 87,448.37 crore in interest income in FY23, up from Rs. 68,846.06 crore in FY22, a 27% increase.
Net profits in FY23 were Rs. 10,852.66 crore as compared to Rs. 14,164.35 crore in FY22, a 23.38% decrease due to a one-time Citibank acquisition cost that is accounted for as an operating expense.
Because of the Banking Regulations Act’s restriction on paying dividends, if it has any intangible assets on its balance sheet, the goodwill is written off.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 1,020.90 | Market Cap (Cr.) | ₹ 3,11,086.60 |
| EPS | ₹ 42.57 | NIM (%) | 4.02% |
| FII Holding | 53% | Public Holding | 9.76% |
| RoE | 18.84% | RoA | 1.82% |
| Dividend Yield | 0.12% | Net NPA | 0.39 |
| Enterprise Value (Cr.) | ₹ 4,51,182.41 | CASA | 47% |
Best Banking Stocks With High FII Holdings #2 – HDFC Bank
During the closed economy prior to 1991, H.T. Parekh founded HDFC in 1977. Later, in 1994, it became the first private company to receive RBI approval to begin operations, and hence HDFC Bank started.
Its headquarters are in Mumbai, and as of September 30, 2023, the bank’s distribution network included 7,945 branches and 20,596 ATMs spread across 3,836 cities.
They offer retail banking, home loans, and mortgages, wholesale or corporate banking, commercial and rural banking, and treasury services to corporations and individuals.
In FY23, HDFC Bank earned 11.20% of its revenue from treasury, 46.47% from retail banking, 29.98% from wholesale banking, and 12.35% from other banking operations.
Foreign portfolio investors account for 52.13% of FII holdings as of September 30, 2023, with Invesco Developing Markets accounting for 1.20% and the Government of Singapore accounting for 2.28%. Foreign institutions account for 0.02%.
On July 1, 2023, HDFC, an NBFC, and HDFC Bank, a private bank, merged to form India’s largest bank. The merger offers greater potential to investors because their customer base is large and can reach out for lending loans, which is one of the merger’s factors.
In FY23, the bank earned Rs. 1,70,754.05 crore in interest income, compared to Rs. 1,35,936.41 crore in FY22, a 25.61% increase. Net profits increased by 20.96% to Rs. 46,148.70 crore in FY23, from Rs. 38,150.90 crore in FY22. For more than 5 years, both income and net profits have been increasing.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 1,487.25 | Market Cap (Cr.) | ₹ 11,33,925 |
| EPS | ₹ 71.78 | NIM (%) | 4.10% |
| FII Holding | 52.13% | Public Holding | 17.31% |
| RoE | 17.40% | RoA | 2.07% |
| Dividend Yield | 1.18% | Net NPA | 0.27 |
| Enterprise Value (Cr.) | ₹ 12,73,284.39 | CASA | 44.40% |
Best Banking Stocks With High FII Holdings #3 – ICICI Bank
ICICI was founded in 1955 at the World Bank’s initiative as a representation for the government of India and its industry. The Industrial Credit and Investment Corporation of India is abbreviated as ICICI. The primary goal was to provide medium- and long-term project financing to Indian businesses. With the liberalization of the economy, the ICICI Group established the ICICI Bank in 1994.
As of March 31, 2023, the bank had 5,900 branches, 16,650 ATMs and Cash Recycler machines, and 1,102 Insta banking kiosks.
In FY23, ICICI Bank earned 42.96% of its revenue from retail banking, 20.95% from wholesale banking, 35.11% from Treasury, and 0.98% from other banking operations.
As of September 30, 2023, FII holdings stood at 44.38%, with foreign portfolio investors accounting for 42.45%, which includes the Singapore government accounting for 3.20% and foreign institutions accounting for the remaining 0.01%.
In FY23, the company earned Rs. 1,21,066.80 crore in revenue, up from Rs. 95,406.86 crore in FY22, a 26.89% increase.
Net profit increased 33.66% from Rs. 25,783.83 crore in FY22 to Rs. 34,463.02 crore in FY23. Income and net profit are rising, allowing NPM to rise from 7.9% in 2019 to 28.47% in FY23.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 936.80 | Market Cap (Cr.) | ₹ 6,62,365 |
| EPS | ₹ 57.34 | NIM (%) | 4.48% |
| FII Holding | 44.38% | Public Holding | 10.10% |
| RoE | 17.30% | RoA | 2.16% |
| Dividend Yield | 0.91% | Net NPA | 0.48 |
| Enterprise Value (Cr.) | ₹ 7,82,778.08 | CASA | 44.70% |
Best Banking Stocks With High FII Holdings #4 – AU Small Finance Bank
The RBI granted the bank a license to operate as a small finance bank on April 19, 2017. Sanjay Agarwal founded a non-banking finance company (NBFC) in 1996, before it was known as AU Financiers.
The bank provides almost all banking services and employs 27,817 people. As of December 31, 2022, the bank had 1,015 branches spread across 21 states and three union territories in India.
Treasury accounted for 13.08% of the company’s revenue, retail banking accounted for 78.29%, wholesale banking accounted for 7.7%, and other banking operations accounted for 0.86%.
The foreign portfolio investors who made up 41.61% of the FII holdings, which included Kotak Funds (1.04%), Nomura India (2.29%), Camas Investments (4.03%), New World Fund (4.29%), Smallcap World Fund (4.78%), and the remaining foreign institutional investors (0.03%), accounted for 41.65% of the total.
In FY23, the company earned Rs. 8,205.40 crore in interest, up 38.56% from Rs. 5,921.73 crore in the previous year. When compared to Rs. 1,129.83 crore, net profits increased by 26.38% to Rs. 1,427.92 crore. While net profit and interest income are trending upward, the net profit margins remained unstable between FY19 and FY22.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 669.95 | Market Cap (Cr.) | ₹ 45,045 |
| EPS | ₹ 24.04 | NIM (%) | 6.10% |
| FII Holding | 41.65% | Public Holding | 13.31% |
| RoE | 15.40% | RoA | 1.80% |
| Dividend Yield | 0.17% | Net NPA | 0.4 |
| Enterprise Value (Cr.) | ₹ 42,427.85 | CASA | 38.40% |
Best Banking Stocks With High FII Holdings #5 – IndusInd Bank
IndusInd Bank was started by Srichand P. Hinduja in 1994. The bank operates 2,631 branches and 2,903 ATMs across India, as well as representative offices in London, Dubai, and Abu Dhabi. The company offers corporate, microfinance, personal loans, vehicle loans, credit cards, and SME loans.
Treasury accounted for 13.18% of the company’s revenue, followed by corporate or wholesale banking (26.44%), retail banking (60.23%), and other banking operations (0.15%).
FPIs held 41.01% of the FII holdings, which included BNP Paribus at 1.25%, Df International Partners at 3.04%, Societe Generale at 1.42%, BofA Securities at 1.86%, Government Pension Fund Global at 2.08%, and others.
In FY23, the company reported interest of Rs. 36,367.92 crore, an increase of 18% from Rs. 30,822.44 crore in FY22. Net profits increased by 54.91% in FY23 to Rs. 7,443.13 crore from Rs. 4,804.63 crore in FY22.
Revenues and net profit increased from FY21 to FY23 before declining due to disruptions from COVID lockdowns. The company has improved its NPM from 15.59% in FY22 to 20.47% in FY23.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 1,484.80 | Market Cap (Cr.) | ₹ 1,14,283 |
| EPS | ₹ 107.21 | NIM (%) | 4.27% |
| FII Holding | 41.48% | Public Holding | 13.49% |
| RoE | 14.53% | RoA | 1.81% |
| Dividend Yield | 1.31% | Net NPA | 0.59 |
| Enterprise Value (Cr.) | ₹ 1,20,320.02 | CASA | 40% |
List of Best Banking Stocks with High FII Holdings
Here are some of the best banks with FII holdings:
| Scrip Name | CMP | FII | Market Cap (Cr.) |
|---|---|---|---|
| Axis Bank Ltd. | ₹ 1,020.90 | 53% | ₹ 3,11,086.60 |
| HDFC Bank Ltd. | ₹ 1,487.25 | 52.13% | ₹ 11,33,925.00 |
| ICICI Bank Ltd. | ₹ 936.80 | 44.38% | ₹ 6,62,365.00 |
| AU Small Finance Bank Ltd. | ₹ 669.95 | 41.65% | ₹ 45,045.00 |
| IndusInd Bank Ltd. | ₹ 1,484.80 | 41.48% | ₹ 1,14,283.00 |
| Kotak Mahindra Bank Ltd. | ₹ 1,740.15 | 39.31% | 3,45,860.34 |
| Bandhan Bank Ltd. | ₹ 217.90 | 32.78% | ₹ 35,101.61 |
| RBL Bank Ltd. | ₹ 230.35 | 30% | ₹ 13,856.83 |
| The Federal Bank Ltd. | ₹ 144.20 | 27.01% | ₹ 35,007.49 |
| IDFC First Bank Ltd. | ₹ 82.74 | 24.48% | ₹ 58,396.10 |
Conclusion
As we neared the end of the article, we looked at some of the best banking with high FII holdings, which demonstrates greater confidence in the company demonstrated by foreign institutions and individual investors.
The banks that are resistant during economic downturns and emerge unscathed will be an example of capital structure strength as well as resilient asset quality.
Banks suffer from NPAs when economic problems or debtor constraints arise as a result of loan nonpayment. To address these issues, the government has even established bad banks or asset reconstruction companies to ensure that the bank’s balance sheet is clean.
What do you think about the future of banks? What kind of transformation can we witness? Let us know your view in the comments section below.
Written By Santhosh
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